QuestionsQuestions (PRESIDENTIAL DECREE NO. 1001)
PD No. 1001 authorizes the development, exploitation, and utilization of mineral deposits other than nickel, cobalt, and iron within the Surigao Mineral Reservation to respond to increased world demand and to improve government revenue generation (foreign exchange), while making the administration and disposition of the reservation more responsive to prevailing circumstances.
It inserts Sec. 2(a) allowing the President, in the interest of the national economy, to authorize the Bureau of Mines to explore, develop, and exploit specified minerals within the reservation either directly or through qualified contractors under operating contracts selected after public bidding or negotiation, subject to Presidential approval.
Mineral deposits other than those of nickel, cobalt, and iron are covered; hence nickel, cobalt, and iron are excluded.
The contract is executed by the Secretary of Natural Resources upon recommendation of the Director of Mines, and it is subject to approval of the President.
The term is twenty-five (25) years, renewable for another twenty-five (25) years.
The operator must pay and guarantee payment to the government out of gross annual receipts from minerals, mineral and metal products, and by-products—royalty of not less than five percent (5%) of such gross annual receipts.
It provides FOB points of export beginning with the end of the first year after the effective date of the contract.
From the effective date of the contract up to and including the fifth year after commencement of actual production, the operator is exempt from taxes, duties, fees, and charges (national and local) directly payable by it for items directly connected with or needed for exclusive operation, except those imposed for work or services actually rendered to the operator; exemptions do not extend to taxes due from contractor’s personnel in their personal capacities.
The operator must put in operation the area or areas covered by the contract within two (2) years from the effective date of the contract.
Penalties may be applied against the operator for failure to effect production and/or reach certain levels of production within specific time periods, as may be agreed upon.
Examples include: (1) furnishing all management, technological and financial services necessary; (2) filing a bond to guarantee full and faithful compliance; (3) entitlement to repatriate foreign capital and remit profits/dividends subject to Central Bank regulations; (4) selecting final compact area(s) within 15 years sufficient for reasonable ore reserves, plant sites, and water resources, not exceeding 30,000 hectares; (5) giving preference to Philippine citizens in employment with qualified capacity; (6) maintaining training and advancement program; (7) providing all gathered information/data to the Bureau of Mines and making books/records open for government inspection.
The operator’s final selected area(s) must not exceed an aggregate land area of thirty thousand hectares (30,000 hectares).
Any royalty derived by the government under Sec. 6-A(1) accrues equally to the Surigao Mineral Reservation Board and the Bureau of Mines.
The portion allotted to the Surigao Mineral Reservation Board is for undertaking special projects, while the portion allotted to the Bureau of Mines is for exploration and development of other mineralized government reservations.
Sub-paragraphs 7 and 8 of Section 6 of the same Act are repealed.
PD No. 958 is repealed. All laws, decrees, orders, proclamations, rules and regulations inconsistent with PD No. 1001 are repealed or amended accordingly.
It takes effect immediately, as stated in Section 5 of the decree.